Thursday, May 20, 2010

Ach du Lieber!

The departure of Deputy Mayor Lieber, after a little more than two years in office, tells us more about the mayor than it does about someone who has proven to be a bad fit for a post that involves any degree of public interaction. The fact that, what now needs to be described as the Bloomberg exodus-the shuffle out of city hall to large real estate firms-has taken its latest mayoral denizen, underscores the myopia of the mayor's economic development outlook.

The Observer captures some of this: "THE FREQUENT COMPLAINTS about Mr. Lieber, including from some on his staff, was that he lacked vision, sticking to what was already on the agenda and not pushing the envelope to deviate from it. Still, he was handed a plate of projects that was probably far more than any administration could realistically take on at once, particularly as budgets shrunk and complexities became apparent. He leaves behind an economic development direction that was still quite focused on real estate development, particularly on two major development projects that have grown in cost, and that arguably seem more complex and distant in terms of reality than when they were first proposed. Coney Island, for which the Bloomberg administration negotiated a favorable deal to buy property from an intransigent private landlord, appears to need hundreds of millions in infrastructure work before any significant housing or commercial development can occur. And Willets Point—which at one point city officials said they intended to bid out to developers before the end 2009—is gradually moving forward but has been slowed significantly by the market."

Indeed, it is quite apparent that real estate development is the narrow purview of the city's economic development agency-to the detriment of an overall strategy that would put the city on a firmer footing to increase jobs and NY's tax base-and the focus on mega projects has, as the Observer points out, been a form of tunnel vision that has neglected the small business engine that drives the city's economy.

As we told the NY Times: "Richard Lipsky, a lobbyist for small businesses who opposed the city’s plan to redevelop Willets Point and to use eminent domain to gain control of the land, said that Mr. Lieber’s approach failed to account for the collateral damage to the neighborhood. “The deputy mayor and his agency have proceeded in a recession to promote a project that is going to cost hundreds of millions of dollars and displace scores of small businesses and thousands of workers without any conceivable plan or a developer to implement it,” Mr. Lipsky said."

That is precisely why NYC has been hard hit by the latest recession-and why the mayor can't seem to fight his way out of an economic paper bag. Bloombberg, and his fleeing legion of advisers, simply come to the task with a trained incapacity to understand and deal with crafting an conomic agenda that can transcend a narrow obsession with big real estate development. It's precisely why Liber gets a stirring valedictory from the NYC Partnership's Kathy Wylde-but really from no one else.

The Times gets some of this: "Mr. Bloomberg has not been shy about going outside of government ranks for their replacements. He appointed Stephen Goldsmith, a former mayor of Indianapolis and a management expert, to Mr. Skyler’s job as deputy mayor for operations, despite his unfamiliarity with New York. But replacing Mr. Lieber may be another matter. The city lost roughly 150,000 jobs during the recession, and the unemployment rate is 10 percent. Modest job growth has been reported recently, but much of it has been at the lower end of the pay scale. “They need a replacement who is able to hit the ground running in order to implement much-needed eeconomic development initiatives,” said Ross F. Moskowitz, a former city economic development official who is now a partner at the law firm Stroock & Stroock & Lavan. “Resources are scarce, and there’s an immediate need for action.”

In fact the Lieber departure really does deserve a Bronx cheer-and his Custer-like leadership in the pormotion of the Kingsbridge Armory development provides a wonderful view of the man's ill fit for the post the mayor chose him for. As the Times reports: "To his regret, Mr. Lieber was unable to overcome opposition in the City Council to turning the city-owned Kingsbridge Armory in the Bronx into a shopping mall. Some Council members, unions and community groups had sought to require prospective employers there to pay workers at least $10 an hour, a sum that both the developer and Mr. Lieber said would have put the mall at a competitive disadvantage."

That, of course, downplays the humorless role that the acerbic Lieber played in the negotiations-as we blogged yesterday: ""As Crain's Insider reports: "The failed Kingsbridge Armory negotiations did not appear to win Deputy Mayor Bob Lieber many fans. Insiders say Lieber offered concessions to the Bronx City Council delegation that he later had to withdraw because Mayor Bloomberg did not agree to them, or because city lawyers raised red flags about their legality." And his personal style didn't help: "Lieber, a former Lehman Brothers executive, did not develop a rapport with the folks across the table, at one point telling the owner of a supermarket opposite the armory that he wasn't interested in the store's Bronx history. And he did not allow the would-be developer of the armory, The Related Companies, to negotiate directly with the Bronx officials."

So while the limited Lieber goes on to yet another real estate destination for a Bloomberg departee, we are still left with the stark truth about the limitations of the Bloomberg world view-a lack of understanding of how ecoonomic development is not always about large mega projects, but more simply devolves from the business climate in the city. And under Bloomberg, taxes gave skyrocketed and regulations proliferated-all while the size of government has increased.

In the end, Bloomberg's NYC has become an even more challenging place to do business in-and job loss has been an ugly concomitant to the mayor's myopia. Lieber, therefore, shouldn't be singled out, when it is the mayor who should shoulder the blame for this sad state of affairs-even after eight years of ballyhooed, "five borough," economic development plans.